GST Voucher Fund made permanent

A government scheme that provides relief to lower-and middle-income families from the Goods and Services Tax (GST) was officially made permanent on Wednesday.

The setting up of the GST Voucher Fund was given the nod by Parliament, a move that will allow families to receive help with their GST regardless of the health of the economy.

"By setting up the GST Voucher Fund, we provide greater certainty of payments which will otherwise be subject to budget availability, depending on economic conditions and other competing priorities in any year," said Mrs Josephine Teo, Minister of State for Finance.

The Government is putting $3.6 billion from this year's Budget into the scheme, with $680 million going to households this year, while the remaining $2.95 billion is used to start the fund.

The voucher gives help in the form of cash, Medisave top-ups and utilities rebates. The move to make it permanent was announced in this year's Budget.

But will the fund be sustainable beyond the initial five years, asked Mr Liang Eng Hwa (MP Holland-Bukit Timah GRC) and Nominated MP Ramasamy Dhinakaran.

Said Mr Liang: "Would the appropriation from the consolidated fund be substantially reduced if we are faced with a prolonged downturn that significantly impacts the government revenue?"

Replying, Mrs Teo said "additional injections to the fund will be made as and when the Budget allows" and "must be predicated upon the continued health of our public finances".

She added that the fund will be mixed with others for the Government to manage them on a consolidated basis, and it will receive a fixed annual return.

Mr Liang also asked about the criteria for deciding people's eligibility based on their income and annual value of their home.

He said some needy people may be shut out from the fund's benefits if their home's annual value is above the $20,000 threshold, or if the individual is an elderly person living with his children in a home with an annual value above $20,000.

Mrs Teo said using income and the annual value of a home are the best available proxies of a person's financial strength.

The current annual value ceiling covers 80 per cent of Singapore homes, including some private property. And the existing criteria benefit one in two adult citizens and eight in 10 citizen households, she added.

"The eligibility criteria for the GST voucher are set to target those who need it most," she said.